by Kevin Fahy
I got my first driver’s license when I was 16 years old, but it took me three years to save enough money to buy my first car. It cost $300.
During those three years I was sometimes able to borrow a car from my parents or catch a ride from a friend, but quite often I travelled by what you might call alternative transportation. I would walk to the nearest road or highway and stick out my thumb.
It wasn’t just local travel. Sometimes I hitched for hundreds of miles, which could take several days. I hitched through inner cities in the middle of the night and rural areas where you weren’t sure a car would ever come along.
Looking back from this day and (my) age it seems crazy, probably because it was. I got rides from people who had drugs, and people who had firearms. One guy was such a creep that after 30 seconds in the car I told him, “I’ll get out right here.”
There was a sense of adventure about hitchhiking. You never knew for sure what you were going to get, or where you were going to end up. I was aware that there were risks, but 18-year-old boys are not exactly risk-averse.
It was also a lot of fun. Some drivers barely spoke to you, but most of them wanted company and asked you all sorts of questions. I met some very interesting people, occasionally becoming pretty good friends, even if it was just for the moment. Sometimes it was hard to say good-bye at the end of the ride.
After I got my first car I picked up hitchers myself, figuring that I was paying forward the kindness which had been extended to me, but by then the culture was already starting to change. Maybe there were too many news stories about serial killers, or too many scary movies, but the practice gradually disappeared. Today we think of hitchhiking as a historical phenomenon, like hobos riding the rails.
We do have something kind of similar to it, though, adjusted for our turned-on, tuned-in, hyper-connected society. Back in the horse and buggy days of 2008, a man named Travis Kalanick was attending a conference about (what else?) the Internet in Paris when he had a hard time finding a cab. Within two years he launched a service called “Ubercab,” which was later shortened to Uber.
The basic idea, as I understand it, is that people with an Uber app on their phone can post a trip that they want to take by car, and the app will show them what Uber drivers are available and where they are. It also gives them a price.
The customer makes the payment and selects the vehicle, the location of which can be tracked on the phone. The vehicle picks him up and takes him to his destination without any paperwork or exchange of money. There is no tip.
Uber now operates in approximately 200 cities in 50 countries. There are more than 160,000 crowdsourced drivers with their own cars qualified by the company, which takes a 20 percent fee and remits the balance to the drivers. Prices are said to average 26 percent below taxicabs, but are adjusted according to supply and demand. This so-called “surge pricing” can make some rides extremely expensive.
Cab drivers and their unions have petitioned city governments and filed lawsuits to try to stop Uber and other Internet-based services from operating in dozens of cities, without much success. The company is very well connected politically and spends millions on lobbying efforts. Meanwhile, according to a recent article in USA Today, the value of a New York City taxi medallion dropped from $1.2 million a year ago to $870,000 just six months later.
I think we all know how the cab drivers feel. Like most of the people who read this magazine, about 10 years ago I was terrified about the effect that the Internet was going to have on my business, and was spending much of my time trying to figure out how to either “beat it or join it.”
I was so preoccupied with it, in fact, that I barely noticed how much the Internet was affecting industries that are not directly related to my own ability to make a living. One day I was riding in a car with a friend of mine who is a dentist, and he was talking about the dramatic changes that were going on in dentistry because of the Internet. I remarked that I had no idea his business would be affected so much.
“That’s just the thing,” he said. “It affects every business.”
It was a sort of revelation to me, but I still couldn’t imagine how it could affect some businesses. Take the taxicab business, for example. People were still going to travel, and you can’t ride on the Internet.
In every industry, people found a way to use the new technology to revolutionize the way things are done, which is the beauty of capitalism. If there is enough money in something, American ingenuity will produce spectacular results. “The market capitalization (total stock value) of Uber is $41 billion, which is more than American, United and Southwest Airlines combined.
There is no Uber service in the small town where I live in New York. It does serve the area where my wife and I vacation in Florida, and the last time I went down there I thought I might try it out to get a ride out of the Sarasota airport.
Of course I never got around to figuring out how it worked, so as I sat waiting to board my flight up north I did a search on my phone to find an airport taxi in Florida. I found one with a nice ad (I appreciate good advertising techniques) and called the place, which actually turned out to be a limousine service. They quoted me a flat rate that wasn’t any higher than a taxi, so I took it.
It was after midnight when I landed in Sarasota and I was beat. As I walked through the terminal my phone rang, and it was my driver telling me which exit door to take. I did so, upon which he relieved me of my bag and whisked me into the idling Town Car, where I was immediately ensconced amid air conditioned leather and classical music.
During the 20-minute ride I chatted with the driver, a very polite young man of about 35 who turned out to be the owner of the limo service. He had immigrated here from Latin America a dozen years ago and worked as a cab driver in Miami until he could save enough to buy his first car. Now he owns four Lincolns and employs 10 people in West Florida.
In the age of Uber, here is a guy who has built a thriving business based upon nothing more innovative than outstanding service, competitive pricing and effective advertising. Imagine that.
The next time I go to Florida I’m going to call him again, unless, that is, I decide to hitchhike.
